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Emily Hernandez
Building a Legend
The Company
● Founded in 1903 in Milwaukee, WI by William Harley and Arthur Davidson
● Largest motorcycle manufacturer in the world
● Manufactures and sells heavyweight custom and touring motorcycles, a line of motorcycle parts, accessories, general merchandise and related services
● One of the most familiar and loved brands in the United States
Business Strategy Framework● “Harley-Davidson's purpose of fulfilling dreams of personal freedom is the foundation
for the Company's core strategies, which include:
○ Delivering high-demand, profitable products and premium retail experiences○ Strengthening Harley-Davidson through agility and responsiveness to be a leader
in the global marketplace○ Extending the Harley-Davidson brand's reach beyond core customers and
markets○ Cultivating great talent, leadership and culture to enable a sustainable future”
Customer Value Proposition
Perceived benefits to customers:
● Functional● Emotional● Social● Self-Expressive
"Harley-Davidson stands for independence, freedom, individuality, expressing one's self, adventure on the open road, and experiencing life to its fullest."-Joanne Bischmann, VP of Marketing for Harley-Davidson
Harley Owners Group (HOG)● Sponsored brand community created in 1983● 1 million members● Serves to promote product, and lifestyle
○ Sponsors many motorcycle events, including rallies and rides for Harley Davidson motorcycle enthusiasts
Core Competencies
● Brand image/loyalty● Differentiation strategy● Customization or aftermarket● Wide distribution network● Skillful workforce● Efficient engine technology● Promoting lifestyle through HOG
Problem: Shrinking market share due to...
Foreign competition
● Japanese motorcycles (Honda and Suzuki)
● Stylish bikes● Cost less to
manufacture● Discounting
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High costs
● Heavily unionized workforce
● Relying on single/limited suppliers
Myopic Target Segment
● Core customers are men over the age of 35
● Baby boomers segment shrinking
● No new customers to replace current customers
Alternatives
Foreign Market Penetration New Market SegmentsLower Costs
1: Penetrate Foreign Markets
● Stop relying on U.S market● Form strategic alliances and joint
ventures to enable entry into foreign markets
● Multidomestic strategy- tailor product extensions accordingly to meet tastes of geographic market
2: Lower Costs
● Knowledge of local conditions, sharing of costs, resources, and assets● Renegotiate delivery costs of components used to manufacture the motorcycle ● Consolidate factories into geographically appropriate areas to reduce shipping
costs to dealerships● Negotiating concessions from the union to reduce man-hour cost● Analyze production line for maximum efficiency
3: New Market Segments- Women
● Develop products and services for females domestically and internationally
● 28% increase in the last 5 years● Lower CC models● Lower seat height● Lower center of gravity● Optional automatic transmission● Campaign “Don’t just go along for
the ride”
3: New Market Segments-Younger Customers
● Recruit younger customers to build lifetime customer loyalty
● Make new motorcycles more affordable with lower-interest financing
● Offer greater customization● Translate campaigns into the Digital
Age
Conclusions
In order to remain a leader in the industry, Harley Davidson should:● Be more responsive to market trends● Focus on collaboration and strong supplier relationships to deliver cost and
quality improvement in the long-term. ● Sell products and promote the experience of motorcycling to both core
customers and outreach customers such as women and young adults.
Discussion Questions
● Should Harley Davidson lower its prices to appeal to younger markets? Will this affect their image?
● Do you see any limitations to the viability and growth of HD in the future?